Empathy, Ethics and Education is what SA needs. The combined score of empathy and ethics is education. There is no education without empathy and ethics. Anything else outside ethics and empathy is vulgar techniques of those who have learnt the book but remain for all intents and purposes unschooled and uncouth.
The hitherto mad rush of privatising Eskom is reminiscent of what the congress of the US signed up for in 1985, achieved and reaped with the merger of Houston Natural Gas Corporation and InterNorth, Inc. 16 years later in 2001.
The Venda Burial Society (VBS Mutual Bank) story of value creation and value destruction has stripes that look like the destruction of energy in the US and holds profound lessons for the rush of blood to the brain at Eskom. VBS Mutual Bank almost shares a birthday with Enron, though it took longer for its demise under the hands of the Johnny-come-lately illiterates — those without ethics and empathy. The history of VBS Mutual Bank cannot be understood outside the signing into law that there will finally be a state bank in SA. But not learning from VBS Mutual Bank will be a disservice to cultural economic geography, a crucial ingredient of how the locus of enunciation makes for a successful developmental state — the Vendanomics of VBS Mutual Bank.
So profound is this bank that it demonstrated beyond any shadow of doubt, that like the Afrikaners in 1933 when they started institutionalising their cultural economic geography muscle, so were the Venda Burial Society as they registered not only the Venda Burial Society in 1982 but when they transformed this into a mutual bank in 1992.
It has taken a national government of SA to do what the Bantustan of Venda did in 1982 out of the Venda Burial Society (VBS Mutual Bank). Ten years later in 1992 the then-Venda government transformed the VBS Mutual Bank into a mutual bank capable of taking deposits and extending housing loans to its members and beyond. For instance, three decades later the former president of the republic, Jacob Zuma, borrowed about R8m from the VBS Mutual Bank to cover his Nkandla mortgage. The establishment of the VBS Mutual Bank in 1982, which later transformed into a mutual bank, is a case study not often taught in business or leadership schools. To sign into law that finally a state bank can be created, should draw from the empathy and ethics that formed the educated developmental state of mind of the Venda people. So profound is this bank that it demonstrated beyond any shadow of doubt, that like the Afrikaners in 1933 when they started institutionalising their cultural economic geography muscle, so were the Venda Burial Society as they registered not only the Venda Burial Society in 1982 but when they transformed this into a mutual bank in 1992. The VBS Mutual Bank held the Venda public service pensions that were later taken over by the Public Investment Fund, which now holds 25% of the in-limbo VBS Mutual Bank, leaving the vibrant 30,000-member strong indigenous knowledge systems-based bank desperate. This happened after the huge value they created was destroyed by an illiterate elite. The Venda-based 1982 thought germinated into a national thought. The demise of VBS Mutual Bank and Enron holds major lessons for load-shedding, the absence of energy and development in SA. What hovers above our heads as the mad rush to who occupies the Union Building is the Damocles Sword, born of similar circumstances that destroyed of VBS Mutual Bank and Enron. The Indlulamithi Scenarios label the period ahead in its three options to SA by 2035 as the Vulture Nation, evolving naturally out of the Gwara-Gwara scenario.
Twenty-two years later I reflect on the intervention of the Wits-Harvard joint Senior Leadership Programme that brought together in the main South African bureaucrats who constituted no less than 90% of the group from all walks of life to consider how a healthier socioeconomic life of a country can be woven. The programme took us off-site to interact with others in case studies, current and past, to reflect on the deeper meaning of our work as leaders in our institutions. Bureaucrats were drawn from government, business and non-governmental institutions to digest our own experiences and juxtapose these with experiences of countries elsewhere in public administration and private enterprises. The obvious always happened by the second week of the programme. One could slice through deep government vs private sector divisions. These also manifested in White vs Black, though the latter was always muted and veiled by the mantra of the rainbow nation. The programme was rich in content and practice, besides the flaring of tempers that occurred from time to time.
The programme had as its central thesis the transformation of business through process re-engineering, turning business around, and the most crucial temporal dimension of this was the one-thousand-day mantra within which a new CEO should have done his work and turned a company onto the path to profitability. This was the crucial marker of whether the agent of change was a true warrior and leader of restructuring of business or not. Our team was rather fortunate or unfortunate in that onto the platform was thrown the question of whether the mantra represented true restructuring or was a matter not of value creation but rather of value destruction. Enron was an important case study. One so relevant today in the case of SA because we have been on a load-shedding couch that has intensified since 2018. We have seen no less than five turnaround gurus who continued to fail in as many years and a deepening crisis of energy that has rendered SA as a non-industrial-player in global terms. Enron was an energy, commodities and services company that was established in 1985. It was a result of a merger between two natural-gas-transmission companies, the Houston Natural Gas Corporation and InterNorth Inc. Kenneth Lay at the helm enlisted the services of Jeffery Skilling, a skilled dealer on trades who within a short space of time accumulated mountains of dollars for shareholders whose insatiable palate for more created conditions to do more of the unethical and unempathetic.
SA legislators, like their predecessors in the US Congress, are adopting laws to deregulate energy, and Eskom is poised to lose its exclusive right to generate and distribute. Skilling was the consultant in the operations as they were conceived, and became its COO. Under his business acumen, Enron was transformed into a trader of energy-derivative contracts. It functioned as an intermediary between natural-gas producers and their customers. Now see the similarity of what is proposed in the case of SA, an intermediary private sector interest between consumers and producers of a strategic asset — energy. The private sector will not be, as happened in Enron, restricted from trades. These are assumed to allow the producers of energy to mitigate the risk of energy-price fluctuations by fixing the selling price of their products. Skilling recruited and appointed Andrew Fastow as his CFO. When Enron Corporation was liquidated, down with it was a familiar site of battle. The famous accounting firm Arthur Andersen fell with it as it immersed itself in the accounting scandals, which facilitated transfer of burdens from the balance sheet of Enron to partner companies.
SA is no saint in the predecessors’ practices. We as a country fought through the front door to experience our own Enron moment. Municipalities were emptied through dubious saving schemes. With the municipalities went VBS Mutual Bank. This bank, which remained a shining light that the poor could in fact establish a bank, was killed by the illiterate and greedy elite establishment. VBS Mutual Bank — a bank that rose out of the ashes of the poor’s suffering — was flattened like Gaza by marauding, privileged illiterates with wanton disregard for ethics, empathy and capital investments made by the poor. Our Enron moment and our VBS Mutual Bank moment is surreal in the hands of the illiterates who display their wares without capacity for empathy and ethics — only the desire to occupy the seat of power. Respect for the dead is a cornerstone and a locus of enunciation for Africans. The Venda proved this as a developmental agenda until the illiterate, uneducated and uncouth came onto the scene and destroyed the civilising mission of Vendanomics of VBS Mutual Bank.
Dr Pali Lehohla is a Professor of Practice at the University of Johannesburg, a research associate at Oxford University, a board member of Institute for Economic Justice at Wits and a distinguished Alumni of the University of Ghana. He is the former statistician-general of SA.
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